Friday, July 31, 2015

American Airlines Opens New Cold Storage Facility for Pharmaceuticals

By Kathleen E. Carey, Delaware County Daily Times
American Airlines celebrated the opening of its $5 million, 25,000-square-foot, temperature-controlled pharmaceutical and health care materials handling facility in Cargo City at Philadelphia International Airport Tuesday.

Airline officials chose to transform a former ground-service equipment facility into a cooled warehouse specifically to house pharmaceutical items. Previously, the items were held in a portion of the 89,000-square-foot refrigerated building across the street, where other items, including produce, seafood and flowers, are stored while in transit.

American Airlines Manager of Cold Chain Strategy Thomas Grubb explained that pharmaceutical customers like a dedicated facility for their product because it could be impacted by particulate from other items when in a shared space.

“The two main goals are that the products remain safe and then remain effective, because basically we’re not just talking about shipments at an airport,” he said. “We’re talking about a patient at the other end. It’s not just a matter of making sure it doesn’t get destroyed in route, but also when it gets to them that it has the therapeutic effectiveness that it needs to have.”

The facility handles both actively and passively stored materials.

In the active container management area, a maximum of 30 C-Safe RKN and Envirotainer pods can connect to electric recharging stations. Each pod has its own internal temperature control system between 0 and 25 degrees Celsius and is set at the temperature the customer requests.

The passive area consists of two cooled rooms — 6,000 square feet designated between 15 and 25 degrees Celsius for delicate products, such as vaccines, therapeutic protein treatments and blood/plasma products, and 3,000 square feet set between 2 and 8 degrees Celsius. Most passive shipments are contained in scientifically designed boxes packed with dry ice or gel packs to maintain a certain temperature for a specified time.

There is also a deep frozen area reserved for items that need to be kept between minus 10 and minus 20 degrees Celsius.

Officials break ground on Holtec site in Camden

by Andrew George,
Officials gathered at the southern end of the Camden waterfront on Wednesday to break ground on the much anticipated Holtec International project.

The project, which calls for a 600,000-square-foot manufacturing and technology center, was approved last year for $260 million in incentives by the Economic Development Authority. Holtec will also be making a capital investment of $260 million, which officials hailed as the largest single private investment in the city’s history.

“Today, we are all bearing witness to Camden’s real transformation,” said Mayor Dana Redd. “The city is proud to welcome Holtec International as our new world-class business partner. Holtec is not only committed to building a state-of-the-art technology and manufacturing facility, they are ready and willing to build human capital by proving real job opportunities for Camden residents.”

Holtec President Kris Singh said the future facility will be a “cathedral of industry.”

“We are acutely aware of our social responsibility,” said Singh. “We will work with the state of New Jersey and the city of Camden to leverage our plant to serve as a training academy to help young men and women, especially unemployed Camden residents and veterans, to acquire skills that yield well-paying jobs. Our center also serves to signal the renaissance of manufacturing in the United States powered by private enterprise.”

Lt. Gov. Kim Guadagno called the project’s development a “strong new day for Camden.” She said she had personally worked on the project for the last five years.

“It is incredibly satisfying to be here to see the largest single investment ever in Camden start to come to life,” Guadagno said. “We will continue working toward this city’s renewal, with projects like Holtec’s technology campus. Today, we celebrate not only hundreds of new and retained jobs, but also Holtec’s commitment to the Camden community and its continued presence in New Jersey’s innovation ecosystem.”

“On the same site where the New York Shipyard built the first nuclear powered merchant ship, Holtec will now build the next generation of clean, reliable, carbon-free energy,” Norcross said.

Duke Developing 1.1M SF Spec Warehouse on East Side of Lehigh Valley

by Steve Lubetkin,
Duke Realty Corporation has purchased a 63.1-acre site on the east side of the Lehigh Valley where it will build a new speculative 1.1 million-square-foot, modern bulk industrial building to be available in late 2015 or early 2016.

The warehouse, Building One at the 33 Logistics Park at Chrin Commerce Centre, will be located on Van Buren Road just off Route 33 at the new four-way diamond interchange at Main Street.

“33 Logistics Park - Building One will be well positioned for large users looking for first-class industrial space in the Lehigh Valley, a distribution hub that has high demand, but limited availability,” says Jeff Palmquist, senior vice president of Duke Realty’s Northeast Region. “When complete, 33 Logistics Park Building One will provide users with large space needs the opportunity to move into first-generation space with state-of-the-art specifications in a location that provides unrivaled access to the highly populated New York City metropolitan area. From this building, companies will have ready access to I-78, I-81 and I-80 and be within a day’s drive of more than 40 percent of the population of the United States and Canada.”

Designed with modern bulk warehouse functionality in mind, 33 Logistics Park - Building One will incorporate features maximizing efficiency, including 36' clear height; 48' x 54' column spacing with 60' x 54' staging bays; 112 ? 9' x 10' dock doors; 200' deep truck courts, 277 trailer storage positions and ESFR fire protection. Its cross-dock configuration includes two main entrances, automobile parking at both ends of the building and full truck circulation making the building suitable for multi-tenant occupancy.

“33 Logistics Park - Building One continues the reputation Duke Realty has established for providing first-class distribution facilities in strategic locations,” says Palmquist. “In addition to this facility, we have the ability to develop even more space—up to an additional 1.6 million square feet on two adjacent parcels. This flexibility is especially important if a client has specific needs and requires a build-to-suit facility.”

The new development will be Duke Realty’s third building in the Lehigh Valley, complementing West Hills Business Center, where it owns a  980,000-square-foot bulk warehouse and a 233,000-square-foot bulk warehouse on the west side of the valley. These three facilities, along with other bulk warehouse buildings it owns in Pennsylvania, New Jersey, Delaware, Maryland and Virginia, raise Duke Realty’s Northeast United States industrial portfolio to more than 9.2 million square feet.

Thursday, July 30, 2015

PREIT to demolish Exton Square's Kmart, add organic grocery store.


Pennsylvania Real Estate Investment Trust, owner of Exton Square Mall in Chester County, plans to demolish the site's Kmart building and replace it with a large-format organic grocery store.

PREIT chief executive Joseph Coradino told analysts in a conference call Wednesday that the grocer would be named in the coming days. A lease for 55,000 square feet has been executed, he said.

Philadelphia-based PREIT also has identified a dine-in movie theater and a bowling-and-entertainment center as prospective tenants for the former site of a 118,000-square-foot J.C. Penney Co. store at Exton Square, Coradino said.

The moves come as PREIT - owner of the Gallery at Market East in Center City, the Cherry Hill Mall and Willow Grove Park, among other shopping sites in the region and nationally - pursues a strategy of upgrading its top-performing properties in high-density areas while shedding farther-flung assets.

In a release Tuesday, PREIT said it would soon close on its sale of Uniontown Mall in southwestern Pennsylvania for $23 million. The buyer, who was not identified, will separately acquire ownership of the land on which the mall is built, the company said.

PREIT also has entered into an agreement to sell Gadsden Mall in Gadsden, Ala., Wiregrass Commons Mall in Dothan, Ala., and New River Valley Mall in Christiansburg, Va., to an institutional buyer for $95.4 million.

The transactions would make up a total of 10 malls sold under the company's disposition program, PREIT said. Total funds raised through the sale of those malls and other assets would total more than $560 million, it said.

PREIT is negotiating agreements of sale on two more "non-core" malls, which it said it hopes to execute within the next several weeks.

On the call with analysts Wednesday, Coradino said PREIT was unable to release a development schedule for its planned $325 million revamp of the Gallery because it had yet to secure some state support for the project.

He blamed the delay on the ongoing discord between the Democratic administration of Gov. Wolf and the Republican-led legislature.

PREIT and its partner in the Gallery, Macerich Co., have been awarded $14.5 million in state grants for the project, but have applied for $20 million more.

"There's a lot of tension in Harrisburg right now with our new governor, so we didn't get it done as quickly as we'd like to," Coradino told analysts. "That's why you're not getting the full story on the Gallery."

Liberty Property Trust 2Q FFO 13.6 Percent Higher

by Steve Lubetkin,
Liberty Property Trust says funds from operations available to common shareholders for the second quarter of 2015 rose 13.6 percent, to $0.67 per share, from $0.59 per share for the second quarter of 2014. FFO per share for the six months ended June 30, 2015 was $1.37, compared to $1.17 for the same period in 2014.

Net income per common share (diluted) was up 20 percent, to $0.24 per share for the quarter ended June 30, 2015, vs. $0.20 per share for the quarter ended June 30, 2014. Net income for the six months ended June 30, 2015 was $0.45, compared to $0.69 for the same period in 2014. Net income for the 2015 six month period reflects gain on sale of $0.02 per share, compared with $0.33 per share for the same period in 2014.

“We are very pleased with the continued strength of the core portfolio, evidenced by rent and occupancy growth in our industrial and class A office product,” says Bill Hankowsky, chairman and chief executive officer. “We also advanced our strategic dispositions and continue to see excellent development opportunities. Market operating fundamentals should bode well for the remainder of the year.”

At June 30, 2015, Liberty says its in-service portfolio of 105 million square feet was 93.8 percent occupied, compared to 93.2 percent at the end of the first quarter of 2015. During the quarter, Liberty completed lease transactions totaling 8.7 million square feet of space.

Property level operating income for same-store properties increased by 2.7 percent on a cash basis and by 3.2 percent on a straight line basis for the second quarter of 2015 compared to the same quarter in 2014.

In the second quarter, Liberty opened four development properties for a total investment of $87.7 million. The properties contain 1.3 million square feet of leasable space and were 90.8 percent occupied as of the end of the quarter. The yield on these properties at June 30, 2015 was 7.5 percent.

Liberty began development of four properties totaling 491,100 square feet of leasable space at a projected investment of $33.8 million. The properties include:

1951, 1953 and 1957 TW Alexander Drive, three distribution buildings totaling 321,000 square feet at Liberty Ridge in Durham, NC.
5032 Sirona Drive, a 170,100 square foot distribution building at Shopton Ridge in Charlotte, NC.
During the quarter, a joint venture in which the company holds a 25 percent interest began construction on property containing 210,600 square feet at 400 Arlington Boulevard in Logan, NJ, for a projected investment of $14.4 million.

Liberty acquired one operating property for $36.7 million. The property is a 410,000 square foot distribution building in Fontana, CA. It was 100 percent leased as of June 30 and is currently vacant with a projected stabilized yield of 5.5 percent.

During the quarter, Liberty sold 23 properties containing 1.4 million square feet of leasable space and 3.1 acres of land for $116.1 million. These properties were 89.8 percent leased at the time of the sale. In addition, a joint venture in which Liberty holds a 25 percent interest sold one vacant property containing 198,000 square feet for $8.5 million.

Liberty says it expects to report 2015 FFO per share in the range of $2.60 - $2.65, slightly higher than previous guidance of $2.55-$2.65 per share.

Wednesday, July 29, 2015

Clark Group Leases 100k of Space at Capital Logistics Center

by Steve Lubetkin,
Woodmont Industrial Partners says The Clark Group, a logistics provider for print media, has signed a three-year lease for 103,217 square feet at 400 Capital Lane in the Capital Logistics Center in Middletown, PA.
Capital Logistics Center is a six-building, 1.55-million-square-foot industrial complex situated on more than 100 acres in Middletown, PA. The 242,824-square-foot building, which is owned through a joint venture of Woodmont and AEW Capital Management, is now fully leased.
 It plans to use the space to store publications.
“The Capital Logistics Center is the ideal location for a leading logistics company like The Clark Group and we look forward to forging a long-term relationship with the company,” says Eric Witmondt, chief executive officer of Woodmont Industrial Partners. “Now that the capital improvements are complete, the complex has helped to bridge the gap for quality industrial space in the region.”
400 Capital Lane, recently renovated to modern standards, is one of six class A industrial buildings at the Capital Logistics Center. Features include thirty dock doors, three drive-in doors, T5 lighting, a six-inch reinforced concrete floor and a standing seam metal roof.
The facility is located at the heart of the I-81 Distribution Corridor in central Pennsylvania. It fronts the Pennsylvania Turnpike and is less than a mile away from Harrisburg International Airport. The property is also near local FedEx and UPS facilities as well as Routes I-283, I-83 and 322.

GLP Make Mega Buy with $4.55B Warehouse Portfolio Purchase

In the latest industrial portfolio mega deal since the end of last year, Global Logistic Properties Ltd has agreed to acquire a 58 million-square-foot logistics portfolio spread across 20 major U.S. markets.

The $4.55 billion purchase from Industrial Income Trust will increase GLP's U.S. holdings by 50% to 173 million square feet, with the Singapore-based company becoming the second-largest warehouse and logistics owner and operator behind Prologis (NYSE: PLD) just a year after entering the U.S. market.

GLP won't hold most of the assets for very long after the expected Nov. 16 closing of the IIT deal. The company expects to boost occupancy to 95% while paring down its stake to 10% by next April. GLP said it's in negotiations with several new and existing funds and capital partners attracted by strong demand by major institutional investors for investment in U.S. logistics assets.

"This is an accretive opportunity for GLP that allows us to strengthen our U.S. market presence and growth prospects with minimal incremental overhead," said GLP Chief Executive Officer Ming Z. Mei in a statement.

The fund syndication offering for GLP's first U.S. income fund was significantly oversubscribed, and the company is confident of placing the bulk of the Industrial Income portfolio into its fund management platform by next spring.

GLP is also the largest logistics provider in China, Japan and Brazil, with a global portfolio encompassing more than 500 million square feet valued at $33 billion after the transaction.

The company teamed up with GIC, Singapore's sovereign wealth fund, to enter the U.S. market and buy Blackstone's IndCor Properties portfolio for $8.1 billion in a transaction that closed in January.

In another huge deal in April, a joint venture of Prologis and Norges Bank agreed to pay $5.9 billion for KTR Capital Partners and its 60 million square feet of U.S. industrial space,including eight development projects totaling 3.6 million square feet.

Monday, July 27, 2015

Wal-Mart beefs up Pa. distribution, plans to hire hundreds

Natalie Kostelni Reporter- Philadelphia Business Journal
Wal-Mart Stores Inc. has opened a second mega-distribution center in Bethlehem, Pa.
It's the company's attempt to ramp up its ability to compete with the likes of Amazon and other retailers that are ahead of it when it comes to e-commerce and online delivery of items.

The new 1.2 million-square-foot facility is in the Majestic Bethlehem Center and expected to employ 400 full-time workers. It is part of what Wal-Mart describes as a network of other distribution centers, existing fulfillment centers and its 4,500 bricks-and-mortar stores that seek to quickly ship online orders through multiple lines of distribution.

Wal-Mart has another 1 million-square-foot distribution center at the Lehigh Valley Industrial Park VII. Over the next several years, the two facilities are expected to employ more than 650 jobs.
Retailers are increasingly finding the Lehigh Valley and central Pennsylvania to be important places to maintain distribution centers because of their highway and rail networks, as well as other transportation modes, and its access to such a dense population throughout the Northeast.
Full story:

Rutgers Univ Behavioral Health Leases 22,000 SF in Cherry Hill

Rutgers University Behavioral Health Care signed a 22,159-square-foot lease at the Colwick 57 office building located at 57 Haddonfield Rd. in Cherry Hill, NJ.

The single-story, 37,464-square-foot building was constructed in 1987 on 3.9 acres in the North Camden County submarket of Philadelphia, part of the four-building Colwick Business Center. It is located just west of the Cherry Hill Mall and nearby the Garden State Towne Center along with numerous residential, hotel, amenity, and retail spaces.

Endurance Real Estate Group acquired the office park from C-III Realty Services in July 2013 for $6.9 million. The firm began a major capital improvement plan.

"In the competitive Camden County leasing environment, we are thrilled that Rutgers chose our available office space" said Benjamin Cohen, president of Endurance Real Estate Group.

Available office space remaining at the Colwick Business Center ranges from 2,850-square-foot suites up to a full-building totaling almost 62,000 square feet.

"Activity at Colwick and within the Cherry Hill market has gained momentum, and we are optimistic about additional absorption within Camden County during the second half of the year."

TruMark Financial Credit Union will Relocate to Ft Washington

Natalie Kostelni Reporter- Philadelphia Business Journal

TruMark Financial Credit Union will relocate its headquarters to Fort Washington, Pa., from Trevose, Pa., and close up a large vacancy in the Fort Washington Office Park. The company leased 75,000 square feet at 335 Commerce Drive. In addition to occupying that space, it will have a branch with a drive-through window.

Somerset Properties is the landlord and owns 1 million square feet in Fort Washington. With the TruMark lease, it office space is now 98 occupied.TruMark now makes it corporate home at 1000 Northbrook Drive in Trevose.

The company selected the Fort Washington location because of its access to major highways such as Route 309 and the Pennsylvania Turnpike.
Full story:

Penrose Plaza in Philadelphia Trades

by Steve Lubetkin,
A joint venture involving Abrams Realty & Development of Elkins Park, PA, Siguler Guff & Co., New York, and Onyx Equities of Woodbridge, NJ has acquired Penrose Plaza, a 255,969 square foot, ShopRite-anchored shopping center at Island Avenue and Lindbergh Boulevard in Southwest Philadelphia.

The new owners plan to expand and remodel the ShopRite supermarket at the center, located in the city's Eastwick section, among other improvements to the center.

“This was a highly attractive property and represents one of the region’s most significant transactions this year. This outstanding supermarket-anchored redevelopment opportunity was highly sought after by the investment market. Penrose Plaza is located in one of the most densely populated markets, with more than 14,400 households within a 1.5 mile radius. In addition to its high visibility, there is also limited retail competition, helping to ensure the ongoing success of the tenants and thus contributing to the center’s ongoing occupancy levels. All of this made this property an exciting investment opportunity.”

Penrose Plaza is located near the southwestern suburbs of Philadelphia, just on the border of Delaware County. The retail competition remains limited due to land constraints created by the U.S. Postal Service Processing and Distribution Center, Philadelphia International Airport runway clearances, the John Heinz National Wildlife Preserve, Interstate 95, and the Delaware River. In addition to its high quality tenant lineup, the center is complemented by generous parking in an urban setting.

Saturday, July 25, 2015

Another trophy office building comes on the market

Natalie Kostelni Reporter Philadelphia Business Journal

Roughly three years after buying Five Tower Bridge for $73 million, the owner of the premier office tower in West Conshohocken, Pa., has decided to put the property up for sale.
Some in the commercial real estate industry believe the property could set a new sales record for suburban office buildings and trade somewhere in the neighborhood of $375 a square foot, according to estimates. If it does come in at or near that price, it will exceed a $360 a square foot record set late last year when Radnor Court sold.

MIM-Hayden Real Estate Fund I, which is a partnership comprised of Hayden Real Estate Investments, Miller Investment Management, both of Conshohocken, Pa., and the Davis Cos. of Boston, bought the 8-story, 223,736-square-foot office building at 300 Barr Harbor Drive at the end of 2011.

It was a time when the commercial real estate investment market was still struggling in general, but interest for suburban office properties were especially lagging. Suburban investment sales are just starting to show signs of a rebound.
Recent deals put Five Tower in good shape for a potential sale. This past spring, the landlord renewed and expanded Oracle Corp.’s presence in the building until 2026 and at $33 a square foot rents. The deal solidified the building’s overall occupancy on a long-term basis. Aside from Oracle, Five Tower is fully leased to Hirtle Callaghan & Co., BTG International Inc., Wells Fargo, and KRT Capital Partners.

This is the second office property to come on the market in Conshohocken this month, joining 300 Four Falls, which is also one of the region’s top buildings. It totals 297,320 Square feet and last sold in 2006 for $100 million, or $340 a square foot, a figure it is expected to exceed that when it trades this time around.
Both Five Tower and 300 Four Falls are expected to be chased by institutional investors looking for well located trophy office properties leased up on a long-term basis to credit tenants.
Full story:

Tech, Pharma Companies Go Urban In Real Estate Strategy (Video)

Friday, July 24, 2015

NRC Acquires Springfield Park Shopping Center for $20.2M

National Realty Corporation closed on its acquisition of the Springfield Park Shopping Center located at 805-857 Baltimore Pike in Springfield, PA. Pennsylvania Real Estate Investment Trust sold the asset for $20.2 million, or about $70 per square foot.

The 287,000-square-foot, open-air strip center consists of a main building and a pad site on 15.6 acres in the Delaware County submarket. It was built in 1982 and renovated in 1994.

"This transaction marks another step in our portfolio transformation as we look to recycle capital into creating value in our high-quality mall portfolio," said Joseph F. Coradino, CEO of PREIT. "We have made meaningful strides in reconstituting and elevating PREIT's portfolio quality while improving our balance sheet and will continue to opportunistically dispose of assets that aren't core to our transformed portfolio."

KVK-Tech Acquires Newtown Property for $12.5M

KVK-TECH, Inc. has purchased the former Lockheed Martin facility at 100 Campus Dr. in Newtown, PA for $12.5 million, or about $27 per square foot, from LMC Properties, Inc.

The buyer is a developer, manufacturer, and marketer of FDA-approved pharmaceuticals and will occupy the entire facility following a short-term leaseback by Lockheed Martin through December 2015.

The 26.1-acre campus includes a three-story, 84,817-square-foot office property built in 1970 and a 375,697-square-foot flex R&D building constructed in 1997. There are plans in the works to expand the building in the beginning of 2016, when KVK-Tech will take occupancy.

Brandywine 'Making Excellent Progress': Sweeney

by Steve Lubetkin,
Brandywine Realty Trust says its financial performance in the second quarter was largely flat compared with the same period last year. Funds from operations were $57.4 million or $0.32 per diluted share vs. $57.3 million or $0.36 per diluted share in the second quarter of 2014. Net income jumped to $1.3 million or $0.01 per diluted share in the second quarter of 2015 vs. $0.4 million or $0.00 per diluted share in the second quarter of 2014.

"During the second quarter, we continued to make excellent progress on our 2015 business plan," says Gerard H. Sweeney, president and chief executive officer of Brandywine Realty Trust. "We continue to capitalize on improving market conditions and raised our speculative revenue target by 2.1 percent, having already achieved 98 percent of our 2015 speculative revenue target.  We have also seen an acceleration in our portfolio disposition program and given the current strength of the investment market, have increased our sales goal to $300 million. Given our strong operating results coupled with our accelerated dispositions, we are maintaining our 2015 FFO guidance range to $1.40 to $1.46 per diluted share."

Brandywine says it leased approximately 1.6 million square feet and commenced occupancy on 506,000 square feet during the second quarter of 2015.  The second quarter occupancy activity includes 123,000 square feet of renewals, 262,000 square feet of new leases and 121,000 square feet of tenant expansions.  Brandywine has an additional 636,000 square feet of executed new leasing scheduled to commence subsequent to June 30, 2015.

Brandywine achieved a 78.2 percent tenant retention ratio in its core portfolio with net absorption of 194,000 square feet during the second quarter of 2015.  Second quarter rental rate growth increased 6.7 percent as renewal rental rates increased 9.5 percent and new lease/expansion rental rates increased 3.6 percent, all on a GAAP basis.

At June 30, 2015, the REIT’s core portfolio of 193 properties comprising 23.6 million square feet was 91.7 percent occupied and the company is now 94.4 percent leased (reflecting new leases commencing after June 30, 2015).

The company says it sold seven office properties located in Delaware, California and Virginia for $119.2 million.  The seven properties totaled 765,000 square feet and were 71 percent occupied.

In new developments, Brandywine says Encino Trace I, a 160,000 square foot building located in Austin, TX, is 100 percent leased. It has signed a new 228,000 square foot lease at its 1900 Market Street, Philadelphia, PA redevelopment project.

The firm has also:

Increased its disposition target from $180 million to $300 million, and has approximately $40 million of land under contract or letter of intent to sell.
Acquired the remaining 50 percent ownership interest in Broadmoor Austin Associates and the underlying 66 acre fee interest for $92.6 million cash, while assuming and repaying a secured mortgage totaling $51.2 million.
Acquired land parcels located at the 2100 Market Street block in Philadelphia for $18.8 million.
Entered into a joint venture arrangement with The JBG Companies to acquire a 70 percent interest in two vacant land parcels located in the NOMA sub-market of Washington, DC for $28.4 million.  Both Brandywine and The JBG Companies will have co-developer responsibilities.
Acquired a land parcel in Capitol Riverfront submarket of Washington, DC in April 2015 for $20.0 million.  The site can accommodate a 271,000 square foot office building.  Subsequent to the acquisition, Brandywine contributed the property into a joint venture with Akridge serving as co-developer and having a five percent ownership interest.
FFO available to common shares and units in the second quarter of 2015 totaled $57.4 million or $0.32 per diluted share versus $57.3 million or $0.36 per diluted share in the second quarter of 2014.  The second quarter 2015 payout ratio ($0.15 common share distribution / $0.32 FFO per diluted share) was 46.9 percent.

Net income allocated to common shares totaled $1.3 million or $0.01 per diluted share in the second quarter of 2015 compared to a net income of $0.4 million or $0.00 per diluted share in the second quarter of 2014.

In the second quarter of 2015, Net Operating Income (NOI) excluding termination revenues and other income items increased 1.7 percent on a GAAP basis and increased 1.3 percent on a cash basis for 184 same store properties, which were 91.2 percent and 89.1 percent occupied on June 30, 2015 and June 30, 2014, respectively.

FFO available to common shares and units in the first six months of 2015 totaled $115.8 million or $0.64 per diluted share versus $110.9 million or $0.69 per diluted share in the first six months of 2014.  The first six months 2015 FFO payout ratio ($0.30 common share distribution / $0.64 FFO per diluted share) was 46.9 percent.

Net income allocated to common shares totaled $8.0 million or $0.04 per diluted share in the first six months of 2015 compared to net loss of $3.7 million or ($0.02) per diluted share in the first six months of 2014.

Timing is Right for Redevelopment

In celebration of’s 15th anniversary coverage, we asked CORFAC International president Scott Savacool about the topic of development, redevelopment and adaptive reuse on older buildings. He tells that it is a major trend these days, and in fact, points out that it is happening all over the country.

In fact, he points out that three CORFAC firms are currently involved in three major redevelopment and conversion projects that are bringing to life some older and historic commercial properties in their respective communities.

Lehigh Valley, PA: Michael Bartolacci with The Garibaldi Group/CORFAC International (Bethlehem, PA) is working with developer Glendon Properties in Wilson Borough on the massive redevelopment of the former Dixie Cup plant, a 600,000-square-foot, four-story property.

The building was constructed in 1921 for what became the largest cup manufacturing company for decades in the U.S. When complete, Dixie Commons - as the project is now called, will consist of 233 upscale apartment homes in one-bedroom, two-bedroom and studio configurations plus 141,200 square feet of commercial and retail space. Bartolacci was tapped to market the office space.

Joseph Reibman, the president of Glendon Properties and also the Managing Partner for the limited partnership that owns the property, has been involved with the Dixie Cup plant for more than 30 years. The plant structure features poured-in-place concrete-slabs with nine-inch thick walls and floors.

The Dixie Cup Corporation merged with the American Can Company in 1957 and by the late 1970s Dixie relocated its manufacturing to a new facility in the Easton, PA, area. In the 1980s, Reibman and his partners acquired and leased the Dixie building to a third-party logistics provider for use as a warehouse/distribution center.  Major customers were ALPO Pet Foods (cans), Mobil Chemical's (now Pactiv) consumer products division and Hefty (trash bags) for distribution throughout the East Coast. Yet demand for multi-story properties for logistics operators lost favor to the single-story industrial buildings with generous ceiling heights that are commonly used by distribution companies today.

Reibman tells that the timing is right for the redevelopment and the market demand is high for this type of mixed-use property.

“We were approached by an investor/developer in 2006 to sell the building – they had plans to convert the building to apartments then, but the financing market disappeared with the recession. Our property is only 60 miles to New York City, we have major employers nearby and 11 colleges and universities in the area. Approximately 25,000 people from the Lehigh Valley commute to work – many of them to Manhattan, and they are generally good-paying jobs. Wilson Borough and neighboring Easton can certainly support new housing and there is also good demand for office space here,” Reibman said.

Reibman is currently working on financing the $70 million to $80 million redevelopment and gathering final bids for environmental work (the concrete columns were painted with lead-based paint and most of the plumbing was wrapped in asbestos). He hopes to have the environmental work done by the end of the year and renovate the exterior of the building all at once including the installation of new windows. The apartments and office space will be built out in phases beginning in 2016. Part of the project calls for removing sections of roofing to open up courtyards in between building wings, which will also allow for copious amounts of light to enter the future apartments. The apartments and office space will have oversized windows and ceiling heights between 12 feet and 14 feet, according to Reibman. The ground floor retail areas have not been leased, though Reibman believes that a restaurant operator will likely want some of the space, and there are tentative plans for a wine bar.

NK Architects of Morristown, NJ, and New York City are the project architects.

Wednesday, July 22, 2015

Bob's Furniture Leases 40,000 SF in Mays Landing

Bob's Furniture signed a 40,000-square-foot retail lease at 4403 Black Horse Pike in Mays Landing, NJ.

The 106,757-square-foot Hamilton Convenience Market shopping center was built in 1987 in the Southern New Jersey submarket. Other tenants include Fear Factory and Flyers' Olympic Sports Academy.

Hughes Relocation Services Renews 90,000-SF Lease in Lansdale

Hughes Relocation Services, Inc., a residential and commercial relocation and transportation services company, renewed its lease for 90,037 square feet in the industrial building at 1000 N. Cannon Ave. in Lansdale, PA. 

The single-story building totals 896,048 square feet in the North Penn Business Park, part of the East Montgomery County Industrial submarket of Philadelphia. The property was constructed in 1940 and renovated in 2006. Other tenants there include Accupac, Inc. and Apex Display Group.

Plymouth Woods Sells for $20.8M

GPX Realty Partners LP sold the Plymouth Woods Office Park at 521-531 Plymouth Rd. in Plymouth Meeting, PA to Exeter Property Group for $20.75 million, or about $110 per square foot.

The five-building campus totals 188,360 square feet of office space on 37.5 acres. Built in 1985, the asset is just shy of 80 percent occupancy, home to such tenants as Beneficial Bank and Coca Cola. Inks Industrial Lease for 231,000 SF, a new online shopping club with corporate offices in New Jersey, signed a lease for 230,633 square feet of industrial space at the Pureland VI building at 200 Birch Creek Rd. in Logan Township, NJ.

The 597,232-square-foot, functional cross-dock distribution facility was built in 1991 on 74 acres in the Gloucester County Industrial submarket of Philadelphia's Washington Twp. It features 58 loading docks and two drive-ins, 25-foot clear heights, 1,000-amp heavy power, 42-foot column spacing, and a fenced lot. UPS Supply Chain Solutions occupies almost 250,000 square feet there, with more than 115,000 square feet still available for lease.

Birch Creek Distribution Center, located within the Pureland Industrial Complex, is strategically located midway between New York City and Washington DC, with excellent access to all major highway systems in the area including I-295, the NJ Turnpike, and the Commodore Barry Bridge connecting to Pennsylvania routes I-95, I-76 and I-476. It is just 10 minutes from the Delaware Memorial Bridge, 20 minutes from Philadelphia’s International Airport and Center City and a 90 minute drive to Baltimore.

Tuesday, July 21, 2015

Monthly Economic Outlook – July 2015 (Video)

REITs of the cloud (Video)

Higher Yields Draw Philly Office Investors

by Steve Lubetkin,
Expanding construction by one of the market’s largest employers, Comcast Corporation, seems to be serving as a stimulant for the Philadelphia office market. A steady pace of hiring in the Philadelphia metro is increasing demand for office space as companies look for larger locations to house their growing work forces.

Firms are scouring the market for available space both in the CBD and in suburban areas, the report says. Many smaller businesses are expanding, adding fewer than 100 jobs and backfilling dark space in adjacent suites or looking for new locations.

“A lot of people out there, both tenants and investors, are interested in Philadelphia office. I think there are a lot of drivers for that. The growing start up tech industry, the healthcare industry here is one of the strongest per-capita in the country. It’s become an area where a lot of investors are starting to look because there’s a little bit more of a yield in the opportunity here.”

Overall, Philadelphia office development is on the rise, although it is expected that deliveries this year will fall significantly below the 10-year average.

“They are looking for larger spaces.There is a very limited amount of larger space for tenants to occupy in class A properties.”

Most projects are pre-leased, build-to-suit projects or mixed-use buildings with large office components. Many of those projects won’t be completed for the next few years. The balance of new construction and demand has kept vacancy stable for the past several years. Rents, on the other hand, have been able to post modest gains, benefiting property owners, the report says.

Philadelphia’s stable economic growth is fostering tighter office operations with higher first-year yields, attracting investors from neighboring metros and intensifying competition among buyers.

Average rents increased 2.1 percent to $23.05 per square foot, up nearly 1 percent above the pre-recession high set in mid-2008. In the same span last year rents rose 1.7 percent. Class A asking rents averaged $26.44 per square foot, climbing 1.2 percent during the past year. At Class B and C properties asking rents advanced three percent vs. last year, to $20.52 per square foot.

The Main Line submarket recorded the highest rents at $30.88 per square foot, followed by the Bala Cynwyd-Narberth and Conshohocken submarkets at $30.21 and $30.15 per square foot, respectively. One of the strongest rent growth was in the Market Street East submarket, which rose 10.9 percent to $24.21 per square foot. Marcus & Millichap sees average asking rents rising 1.7 percent this year to $23.25 per square foot. In 2014, rents for marketed space rose 1.5 percent on average.

Some key highlights of the report:

Employment: This year employers are on track to boost total employment 1.2 percent, adding 35,000 positions. In 2014, a total of 45,400 jobs were created in the Philadelphia metro, while the unemployment rate plunged 130 basis points to 5.5 percent.

Construction: The construction pipeline will shrink this year with only 200,000 square feet of office space scheduled for delivery. Last year 690,000 square feet was placed into service. More than 2 million square feet is expected through 2018.

Vacancy: A slow construction pipeline will enable vacancy to fall 40 basis points this year to 15.7 percent on net absorption of 1.3 million square feet. In 2014, average vacancy recorded a 20-basis-point increase.

Rents: Average asking rents will rise 1.7 percent this year to $23.25 per square foot, up 1.6 percent above the pre-recession high. In 2014, rents for marketed space rose 1.5 percent on average.

Gateway Shopping Center in Wayne, PA Getting Upgrades

by Steve Lubetkin,
Regency Centers will be enhancing the shopping experience at Gateway Shopping Center, Regency’s premier shopping center in the Philadelphia market, beginning in late July.

“There are a lot of exciting changes happening in this market and we are proud to say that we are helping to bring about that change to our retailers and our community,” says John Hricko, vice president and regional officer for Regency Centers. “The changes we’re making at Gateway are focused on enhancing the things people already love about the center, with a few new improvements.”

Plans call for improvements to the center’s aesthetics, including raised architectural features and a modern and vibrant color scheme. The center’s landscape design, parking lot lighting, and signage will also be upgraded.

Gateway Shopping Center is located in Wayne, PA, northwest of Philadelphia and situated on heavily trafficked State Highway 202, with close proximity to the 2.9 million sq. ft. super regional King of Prussia Mall.

“This is a dynamic area with a diverse population,” says Hricko. “Not only do we strive to be active members of this community as people, but also as a property. This means continuing to evolve with our customers’ wants and needs from all angles.”

Surrounded by a robust office community contributing to a workplace population over 78,000 within a 3-mile trade area, the center occupies 214,212 sq. ft. and includes national retailers like Trader Joe’s, TJMaxx, Staples, Starbucks, Panera, and MOD Pizza.

Construction is estimated to last through late fall 2015.

Monday, July 20, 2015

A&P Looking To Sell 120 Stores, Close 25

The Great Atlantic & Pacific Tea Company Inc. (A&P) has filed its second voluntary petition for Chapter 11 bankruptcy reorganization in five years. As part of the filing, the national grocery store retailer is asking for approval to sell up to 120 stores for $600 million.

In addition, A&P is seeking lease cancellations for 25 additional stores.

"After careful consideration of all alternatives, we have concluded that a sale process implemented through chapter 11 is the best way for A&P to preserve as many jobs as possible, and maximize value for all stakeholders," Paul Hertz, president and CEO of A&P, said in a statement announcing the move.

Interest from other grocery operators has been robust during the company’s sales process to date, Hertz added.

Evercore Group LLC, A&P’s investment bankers, has been marketing a set of what A&P calls its Tier 1 stores for sale. Evercore contacted more than 30 potential buyers and to-date have received eight bids from that process.

The company currently operates 296 stores primarily in the Northeast under the brand names A&P, Best Cellars, Food Basics, The Food Emporium, Pathmark, Superfresh and Waldbaum's.

The 25 stores being closed were identified by A&P as Tier 3 stores and have posted ongoing store operating losses, the company said. The stores have an aggregate daily negative cash flow rate of $75,000 and $2.5 million each month.

The closure of the stores is expected to save about $20 million for the remainder of the 2015. Selling the assets from those store could yield $48 million in gross proceeds, the company added.

"While the decision to close some stores is always difficult, these actions will enable the company to refocus its efforts to ensure the vast majority of A&P stores continue operating under new owners as a result of the Court-supervised process,” Hertz said.

A&P previously filed for Chapter 11 reorganization in December 2010. That process resulted in the closing of about 50 stores and A&P exiting the Washington/Baltimore region.

Stores Slated for Closure

2105 Philadelphia Pike, Claymont, DE
3901 Lancaster Pike, Wilmington, DE
115 Belmont Ave, Belleville, NJ
325 Route 35, Cliffwood, NJ
Botany Plaza 85 Ackerman Ave, Clifton, NJ
895 Paulison Ave, Clifton, NJ
50 Race Track Rd, East Brunswick, NJ
561 Route 1, Unit B, Edison, NJ
2101 Route 35, Holmdel, NJ
651 North Stiles St, Linden, NJ
1043 US Route 9, Old Bridge, NJ
1256 Indian Head Road, Toms River, NJ
2 Westbury Avenue, Carle Place, NY
2150 Middle Country Rd, Centereach, NY
3620 Long Beach Rd, Oceanside, NY
399 Route 112, Patchogue, NY
1510 Old Country Rd., Riverhead, NY
1301 Skippack Pike, Center Square, PA 
400-450 W. Swedesford Rd, Devon, PA 
420 MacDade Blvd, Folsom, PA 
863 E. Baltimore Pike, Kenneth Square, PA 
1851 S. Christopher Columbus Blvd, Philadelphia, PA 
840 Cottman Ave., Philadelphia, PA 
85 Franklin Mills Blvd, Philadelphia, PA 
300 S. Best Ave & Main St, Walnutport, PA

The Hub Opens Location in Four Falls Corporate Center in West Conshohocken, PA

by Steve Lubetkin,
 The HUB has signed a long term lease at Four Falls Corporate Center in West Conshohocken, PA. The building owner is the Arden Group. Arden purchased Four Falls in 2014, and is renovating the property.

“The renovations that Arden Group has embarked upon make Four Falls an extremely attractive office building in an increasingly competitive market.When making its space decision, The HUB especially appreciated the importance of Arden Group’s vision, which is coming to redefine class A office space in the region.”

The HUB, which also has a presence at the Cira Centre adjacent to Philadelphia’s 30th Street Station, fuses meeting, collaborative and co-working spaces within its premises. The HUB will also manage Four Falls’ common area atrium, outside deck and will team with a local restaurateur to run the revamped cafe space.

Friday, July 17, 2015

Office and Retail Leases This Week

By Steve Lubetkin,
Office and retail leases continued to dominate New Jersey and Pennsylvania market activity in recent weeks, while financial firms took advantage of the market's appetite for well-collateralized loans to helped clients reposition their financial obligations. Here are some highlights:


RIDGEFIELD PARK, NJ–Franklin Templeton Investments has signed a 10-year lease for 13,000 square feet of new office space at KABR and Kushner Companies’ 55 Challenger Road in Ridgefield Park, NJ.  This new office is located in Overpeck Corporate Centre, which is home to several world-class corporations and conveniently located just minutes from New York City. "We are pleased to have secured such a well-appointed office space. The Overpeck Corporate Centre provides a very professional yet comfortable working environment for our employees," says Don Taylor, chief investment officer of Franklin Equity Group - US Value, the investment management team that will occupy the new office. The 13,000-square foot office offers amenities including a new lobby, cafeteria and gym for employees to enjoy.

MONTCLAIR, NJ—The Pinnacle Companies says The SienaMontclair, a luxury mixed-use building on the corner of South Park and Church Streets, has leased its last remaining retail space.  Little Nest Photography, a boutique portrait studio, will open later this summer in a 1,856 square foot space, a block from the new Jimmy John’s gourmet sandwich shop. The Siena at Montclair offers 35,000 square feet of street-level boutique retail space, and 101 luxury condominium residences on the site of the former Hahnes department store, with retailers including Starbucks, New York Sports Club, Verizon, Supercuts and the Woodhouse Spa.  Little Nest Photography is expected to open in fall 2015. The Siena project was built as a joint venture between The Pinnacle Companies, Kohl Partners and the Mandelbaum family.

HACKENSACK, NJ—Fitness franchise TITLE Boxing Club has leased 4,000 square feet at Summit Plaza in Hackensack. The 100,000-square-foot Bergen County shopping center is owned and managed by Alfred Sanzari Enterprises. TITLE Boxing Club offers total-body boxing and kickboxing fitness workouts. Located at 370-380 West Pleasantview Ave. at the intersection of Route 17, Summit and West Pleasantview avenues, Summit Plaza is anchored by a 62,000-square-foot Super Stop & Shop. The center’s tenants include Great Expressions Dental Centers, United Tae Kwon Do Center, Juicy Platters, Harmon Cosmetics, GNC, Payless ShoeSource, RadioShack, Dress Barn, The UPS Store and Blimpie, as well as typical neighborhood services such as a dry cleaner and a pizzeria. One 1,200-square-foot retail space remains available at Summit Plaza.

55 Challenger Road, Ridgefield Park, NJ
UNION, NJ—Fast-casual sandwich franchise Jersey Mike’s Subs has leased 1,800 square feet at Galloping Hill Center. North Plainfield, N.J.-based Levin Management is exclusive leasing and managing agent for the 68,000-square-foot shopping center.

WEST WINDSOR, NJ—Buffalo Wild Wings is preparing to open its first location in Mercer County, NJ following the purchase of a former Chili’s location at 3465 US Highway 1 in West Windsor. Winick Realty Group NJ founding partner and senior vice president Tyler Bennett represented AntSul Group in the off-market transaction, which marks Buffalo Wild Wings’ sixth location in New York and New Jersey. Bennett is continuing to work with AntSul Group to find additional Buffalo Wild Wings locations in Staten Island, NY, as well as Hamilton Township and New Brunswick, NJ.

Thursday, July 16, 2015

K-Mart Bensalem Trades for $3.575M

by Steve Lubetkin,
1837 Street Road, a 100,000-square foot property net-leased to Kmart in Bensalem, PA was sold for $3.6 million.

The asset sold for $3.575 million, $376,025 above the asking price, after a brief yet extremely competitive marketing period during which 12 offers were made within the first 24 hours.

Kmart has been located at 1837 Street Road since 1983.  Kmart recently exercised a five-year option on its lease because of strong sales at the location.

When selling commercial real estate should I list with an agent? (Video)

Wednesday, July 15, 2015

Blackstone's Gray: Watch these warning signs in real estate (Video)

East Norriton Sears Outlet moves to DeKalb Pike

By Gary Puleo, The Times Herald

Sears Outlet to the left, Sears Hardware to the right.

It’s all Sears to us when we come through the doors of the building emblazoned with the familiar 129-year-old name out front.

However, the two stores are actually separate entities, explained Mike Topping, manager of Sears Outlet, which recently moved across the road from Northtowne Plaza Shopping Center to share a remodeled space at 2811 DeKalb Pike, East Norriton, with longtime occupant Sears Hardware store.

“We moved in here from across the street and squeezed in beside them, so they moved around a lot of their product and this now gives the customer some great options,” Topping said. “We have a great relationship with them but we have to view ourselves as competitors.”

While the hardware side sells new appliances only, at Sears Outlet you’ll find all sorts of roads to take toward purchasing that new-to-you refrigerator, washer or dryer — from fresh-out-of-the-carton, sparkling new to reconditioned/recertified, discontinued and yes, scratch-and-dent merchandise.

“We have a little bit of everything,” Topping said, adding that some appliances that are marked “returned, tested” may have needed repairs or simply been returned by a customer for other reasons.

“We are a recertification center. There are times when brand new products fail. A new refrigerator may have a leaking compressor, which needs to be resealed or replaced. Anything that’s not taken out of the box by us can’t be called ‘new,’ but it will be repaired and tested. We also explain to people that a product could have been at somebody’s house for 30 days, and they didn’t like it. Sears takes it back and that becomes a ‘returned, tested’ and recertified item.”

The merchandise is much the same at the new address as it was when Sears Outlet opened in the old Kmart across the street in 2011.

More than 1,000 Sears subsidiaries and franchises across the country have been spun off from Sears Holdings Corp. to increase the profitability of the iconic but troubled brand, with both Sears Outlet and the Hardware segment trading under the Sears Hometown and Outlet Stores, Inc. (SHO) company, based in Illinois.

“We’ve been Sears Outlet for a long time and actually, Sears Outlet is the fastest growing aspect of Sears,” noted Topping, who allowed that relocating the Sears Outlet store was the only plausible action to take.

“When we first moved into the Northtowne Plaza store we were also an apparel processing center, bringing in tons of apparel and redistributing it to Sears Outlets. I think they decided that business plan wasn’t working out for them and we stopped using about a third of the building. We decided that since SHO owns the building over here there was no sense paying all that rent for space we weren’t using. This is a newer building and in much better shape.”

Appliances from all the name brands like Kenmore and Whirlpool are the real headliners at the Sears Outlet store and at, but you’ll also find furniture, mattresses, tools, sporting goods and sundry items here and there.

“The savings on our side of the building are kind of ridiculous … we have 50 percent off refrigerators right now. Other places will have sales for a couple of days, but day in and day out nobody will touch us on prices, which are generally 30 to 55 percent off,” Topping said.

And sometimes the discounts go even deeper than that.

If an item sits around for a month, the price drops. If there are no takers after another month has passed, the price comes down yet again, Topping explained.

“It’s a liquidation process, so in the course of eight months that price will go down to dirt cheap. It may be 80 or 90 percent off if we need to get it out of here. If it’s been here for eight months,” he added, “you may wonder what’s wrong with it, but the price gets down so low you just get right past that and recognize a good deal.”

Sears Outlet is open Monday through Saturday 8 a.m. to 9 p.m. and on Sunday from 9 a.m. to 6 p.m.

Public Ledger Bldg Has New Owner

Carlyle Development Group acquired the Public Ledger Building at 600 Chestnut St. in Philadelphia, PA from LNR Partners LLC for $58 million, or about $109 per square foot.

The 13-story, 533,945-square-foot, 4-Star office building was originally built in 1937 and was renovated in 2007. GSA and Liberty Mutual Insurance anchor the property.

Heritage Senior Living Sells Penn Portfolio for $87.5M

Griffin-American Healthcare REIT III, Inc. acquired a portfolio of three senior housing properties located across Eastern Pennsylvania from Heritage Senior Living LLC for $87.5 million, or about $254,000 per unit.

Built in 2005, the Hanover Facility in Bethlehem, PA is a three-story, 109,000-square-foot independent living facility with 114 beds, currently at 96 percent occupancy. Built in 2000, the Chestnut Knoll Facility in Boyertown, PA is a three-story, 62,000-square-foot facility with 86 units, including 48 designated for assisted living and 38 for memory care, that are currently 95 percent occupied. Built between 1986 and 2008, the Powder Mill Facility in York, PA is a two-story, 89,000-square-foot facility with 145 units, comprised of 98 designated for assisted living, 24 for independent living, and 23 for dementia care. An additional three-acre vacant lot in Boyertown was included in the sale.

The buyer funded the acquisition in-part with cash on hand from net proceeds of its initial public offering, and the assumption of existing debt secured by the Hanover Facility with an outstanding principal balance of approximately $12.1 million.

Student Housing Development to Break Ground in State College

Landmark Properties has joined with PennTrust Properties LLC to develop The Metropolitan, a planned 80,000-square-foot property that will include a 540-bed student housing project at 400 E. College Ave. in State College, PA.

The Metropolitan will feature a 12-story, 80,000-square-foot, mixed-use building including about 32,000 square feet of commercial and retail space, a 9,000-square-foot clubhouse and amenity area, 164 underground parking spaces for retail customers and tenants, a rooftop terrace, and fitness center. Residents will have a variety of floorplans to choose from, including studio units up to five-bedroom suites. Each unit will feature stainless steel appliances, cable and high speed internet, floor to ceiling windows, private baths and granite countertops.

This project is tentatively planned to break ground this month and pre-leasing will begin the second quarter of 2016, with delivery in time fall 2016. Landmark Construction will serve as general contractor on the project, and Landmark Properties will handle management.

Substance Abuse Treatment Facility Moving Out of Tourism District

John Brooks Recovery Center, a substance abuse treatment services facility for men and women, has signed a lease for 20,000 square feet in the Pleasantville Shopping Center at 700-768 Black Horse Pike in Pleasantville, NJ.

The single-story retail center totals 297,255 square feet in the Southern New Jersey submarket of Philadelphia. The property was constructed in 1958. Other tenants there include Family Dollar, United States Post Office, and H&R Block.

JBRC is scheduled to move in by the four quarter, 2015. JBRC's present staff of 115 full- and part-time employees will relocate from their current location in the Tourism District.

Tuesday, July 14, 2015

CoWorking, Not just for start-ups

Why Is Blackstone Unloading Real Estate Assets?

Carlton Gets Conshohocken MF Project $18.5M Bridge Loan

by Steve Lubetkin
The Carlton Group has arranged a bridge loan of $18.5 million in senior debt for the development of two large, luxury mid-rise apartment complexes in Conshohocken.

The sponsor of the deal is a successful local developer that sought an infusion of capital in order to keep the project on track. The lender, which does not typically provide development financing, will keep the loan on its books.

Because plans for the 318- and 270-unit complexes, located at 401 and 433 Washington Street in Conshohocken, PA, are still pending final approval, the transaction illustrates The Carlton Group’s depth of relationships and ability to secure capital under unique circumstances. Stephen Scorgie from The Carlton Group’s Florida office, and Brendan Sullivan, Michael Campbell and Andrew Karaan from the firm’s New York office, managed the transaction.

“Regardless of the circumstances surrounding a transaction, The Carlton Group will assemble a team of professionals with the expertise and critical relationships necessary for structuring and delivering the right financing,” says Howard Michaels, chairman of The Carlton Group. “This financing was particularly artful and reflects the level of commitment and resourcefulness that our clients have come to expect.”

Over the past several years, The Carlton Group has completed more than $6 billion of development equity and debt transactions, regularly working with some of the largest developers and institutions in the world. As a result of this track record, the firm has come to be widely known for its ability to navigate the complexities of high-profile transactions.

Monday, July 13, 2015

500K SF Spec Warehouse Rising in Central PA

by Steve Lubetkin,
Clarion Partners and MRP Industrial have begun construction of Building B at Gateway Logistics Park, a class A, 500,000-square-foot speculative project located in Union Township, Lebanon County, PA. Building B, located at 545 Old Forge Road, will be the first building to be developed within the three building, 1.9M-square-foot Gateway Logistics Park.

"Clarion Partners is very excited to joint venture with MRP Industrial on the speculative development of this project in Central Pennsylvania,” says Andy Sitzer, senior vice president with Clarion Partners. “With the strategic location providing immediate access to I-81 and I-78 and the facility’s state-of-the-art design features, Gateway will be ideally suited to meet the requirements of today’s modern distribution operations.”

In October, the two companies formed a joint venture to acquire 129 acres of the Park with pad-in-place development parcels for a one million-square-foot and a 500,000-square-foot distribution center.

“The pace of speculative development activity in the Northeast has picked up significantly as a majority of the requirements under 700,000 square feet are bypassing build-to-suit options in the market and seeking immediate occupancy,” says D. Reid Townsend, principal with the Baltimore-based MRP Industrial. “The speculative development of Building B addresses this need and maintains our flexibility to deliver build-to-suits in the range of 700,000 to 1,000,000 square feet with Building A.”

Gateway Logistics Park is located at the intersection of the Northeast’s two most prominent distribution corridors, Interstate 81 and Interstate 78. The development will provide convenient access to the region’s major metropolitan areas of New York, Philadelphia, Baltimore and Washington DC, all located within 150 miles. The property is also located within 30 miles of FedEx Ground, FedEx Freight and UPS distribution hubs, responding to the growing trend of direct-to-consumer fulfillment requirements for the retail market.

“Central Pennsylvania’s East Shore submarket, and the location of Gateway Logistics Park in particular, offers outstanding logistical advantages,” says Jones Lang LaSalle’s senior managing director Paul Torosian. “JLL is committed not only to the success of this project, but of the entire area. JLL has been very active in the Pennsylvania market and we’ve been fortunate to be involved in several high-profile transactions. We look forward to leveraging our marketing platform and relationships to lease this class A industrial property.”

In early 2014, the property was approved into the Commonwealth’s Local Economic Revitalization Tax Assistance program, providing future tenants with partial real estate tax relief during the initial ten years of occupancy. When fully developed, Gateway Logistics Park is projected to support over 1,000 new, full time jobs in Lebanon County and provide an immediate boost to support the Union Township, Lebanon County and Northern Lebanon School District operating budgets.

Clarion Partners and MRP Industrial’s other projects include 140 Fulling Mill Road, a 250,000 speculative development in Middletown, PA and Burlington Industrial Park, a four building, 1.58 million square foot campus in Burlington, NJ.

Sunday, July 12, 2015

Brandywine Realty Trust buys Market Street block hit by building collapse

By Jacob Adelman, Inquirer Staff Writer

Brandywine Realty Trust, Philadelphia's biggest office landlord, has bought almost the entire Center City block that was the site of 2013's deadly building collapse that flattened a Salvation Army thrift store.

The publicly traded investment trust bought the 37,000 square feet of land along the southern side of Market Street's 2100 block on Tuesday, president and CEO Jerry Sweeney said. He would not disclose the price.

The purchase of the site - including two buildings, a parking lot, a parking structure, and a vacant lot - is seen as a vital piece in linking Philadelphia's core office district to University City. It also nudges Brandywine further ahead as the city's dominant property owner.

The company already has 6.5 million square feet of office space, far more than the city's next biggest landlord, Equity Commonwealth, according to data provided by Jones Lang LaSalle, a commercial real estate services firm.

"We think it will be a good development site, as market conditions permit," Sweeney said. "Our immediate plan is to clean up the site, make it much more presentable."

Previous efforts to develop the block by Richard Basciano, who sold the land to Brandywine, ended with the death of six people when a building undergoing demolition collapsed onto the thrift shop on June 5, 2013.

The site of the collapsed building is now a lot that is included among 30,000 square feet of vacant space and parking that Brandywine will develop, though Sweeney said the company has not decided what it would build.

Also included are two three-story buildings that it will renovate into rental lofts, shops, and offices.

The purchase excludes the site of a memorial park to the victims at the western end of the block, where the thrift shop once stood, a fire station, and a third multi-story building that Basciano did not own.

While development has been pushing west from City Hall, the block has formed a virtual barrier for further growth on Market Street, said Craig Schelter, director of the Development Workshop, a trade group for the development community.

"Until that block gets done, you can't leap more to the west," he said.

Brandywine already has a significant presence on both sides of its newly acquired site. To the east are its twin Commerce Square high-rises and its 1900 Market Street building, which is being renovated. Near 30th Street station to the west are the mirrored Cira Centre building and the FMC Corp. skyscraper, now under construction.

The purchase follows Brandywine's acquisition this year of a parking structure on east Market Street, which is being heavily redeveloped.

Thursday, July 9, 2015

Blenheim Hospitality Sells Hampton Inn Wyomissing for $16M

Wankawala Organization and Ayer Capital Advisors have acquired the 142-room Hampton Inn at 1800 Papermill Rd. in Wyomissing, PA from Blenheim Hospitality LLC for a total of $16 million.

The gross sales price was allocated as $10 million for the real estate ($70,000 per door) and $6 million for personal property, FFE, licensing, and associated defeasance costs.

The four-story, 30,384-square-foot hospitality property was built in 1987. The average occupancy at the time of the deal was 70 percent with an ADR of $125 and RevPAR of $87.50.

The buyers funded the acquisition in-part with a new $15.2 million loan through Cronheim Hotel Capital. It caries a 120/360 term at a 79-percent LTV.

Ownership Shifts at 8600 Bartram

The Hampton Inn at Philadelphia-International Airport has changed its ownership structure in a deal that values that asset at $26 million, or about $171,000 per room.

The previous structure was organized as a Tenant in Common (TIC), and was recapped because one-third of the TIC investors wanted to exit the investment. A new equity partner, Virtua Partners, acquired the 30 percent interest. Concurrent with the recap, the former TIC structure converted into an LLC, taking title as PHL Hotel Franchisee LLC and encompassing all the new equity interests.

The buyer group recapitalized the asset, securing a new loan with a $17.8 million balance. The loan is on a 120/360 schedule, and has a fixed interest rate of 4.79%.

8600 Bartram Ave. in Philadelphia, PA is a 152-room hotel on 1.6 acres. The six-story, 70,740-square-foot building was renovated in 2004 and is located directly behind Philadelphia International Airport.

Castle Rock Purchases 206-Unit Rental Tower

Federal Capital Partners, Cross Properties, and Alterra Property Group LLC have sold the 206-unit Icon 1616 multifamily building at 1616 Walnut St. in Philadelphia, PA to Castle Rock Equity Group LLC for $112 million, or approximately $544,000 per unit.

The 236,265-square-foot high-rise consists of one-, two-, and three- bedroom units centrally located in the Rittenhouse Square area of downtown Philadelphia. Construction was completed in 2014.

Lindenmeyr Munroe Leases 92,000 SF in King of Prussia

Lindenmeyr Munroe, a paper and packing distributor, renewed its lease of 92,000 square feet in the flex building located at 3300 Horizon Dr. in King of Prussia, PA.

The 97,225-square-foot building was constructed in 1996, part of Renaissance Park in the East Montgomery County Industrial submarket of Philadelphia.

PREIT Connects AT&T with 1501 Wanut Street

by Steve Lubetkin,
PREIT has dialed up AT&T Mobility as the latest tenant for its recently acquired property, 1501 Walnut Street, in the heart of Center City Philadelphia.

"This transaction creates significant value and is the first step in the redevelopment of an asset that represented a unique opportunity in a prime location in a growing Philadelphia retail market," says Joseph Coradino, CEO of PREIT.  "This opportunity is representative of PREIT's dominance in and significant knowledge of the retail landscape in Philadelphia."

PREIT is planning to reposition the 27,000 square foot property it acquired in 2014. The AT&T lease boosts occupancy to 92 percent. AT&T will occupy almost 5,000 square feet on the first and second levels of the building and is expected to open in November 2015. The property is also home to Club Monaco and Cameo Water Wear, and an 18,000-square-foot office tenant.

PREIT Completes Sale of Springfield Park in Springfield, PA

by Steve Lubetkin,
As part of its ongoing portfolio repositioning, Pennsylvania Real Estate Investment Trust has sold its 50 percent interest in Springfield Park, an open air center located in Springfield, PA, for $20.2 million.

The sale continues a PREIT program aimed at repositioning its investments into a portfolio of high-quality enclosed malls. The program has raised $440 million in gross proceeds so far, PREIT says.

Springfield Park is a 287,000 square foot open air center located in suburban Philadephia, anchored by Target and Bed, Bath and Beyond.

"This transaction marks another step in our portfolio transformation as we look to recycle capital into creating value in our high-quality mall portfolio," says Joseph F. Coradino, CEO of PREIT. "We have made meaningful strides in reconstituting and elevating PREIT's portfolio quality while improving our balance sheet and will continue to opportunistically dispose of assets that aren't core to our transformed portfolio."

As previously reported by, PREIT sold its Nittany and North Hanover Malls in September 2014; its 50 percent interest in Whitehall Mall in Allentown, PA in December; and has announced plans to divest Palmer Park Mall in Easton, PA; Uniontown Mall in Uniontown, PA; Lycoming Mall in Williamsport, PA; and Washington Crown Center in Washington, PA

Tuesday, July 7, 2015

Monthly Economic Outlook – June 2015 (Video)

Woodmont Fills Yet Another Harrisburg Distribution Center

by Steve Lubetkin,
Woodmont Industrial Partners has filled up yet another quarter-million square foot distribution center in central Pennsylvania, more evidence of roaring demand for logistics space in the Northeast as companies transform their supply chains to meet e-commerce needs and rapid delivery demands from consumers.

AC Products has renewed its 61,620 square-foot long-term lease at 400 Capital Lane, part of the Capital Logistics Center, a six-building, 1.55-million-square-foot industrial complex situated on more than 100 acres in Middletown, PA. The 242,824-square-foot building is now fully leased.

AC Products renewed its lease for a term of five years and three months. The company will use the space as a warehouse and distribution facility, as well as a showroom and sales space to display product for contractors and customers.

“The strategic location and contemporary features of 400 Capital Lane were some of the key factors in AC Products’ decision to stay in the space,” says Eric Witmondt, CEO of Woodmont Industrial Partners. “Capital Logistics Center is truly one of the most advanced industrial parks in the region and we’re pleased that both current and prospective tenants share in this sentiment.”

400 Capital Lane is one of the six state-of-the-art, class A industrial buildings at Capital Logistics Center. Features include thirty dock doors, three drive-in doors, T5 and high-bay lighting, a six-inch reinforced concrete floor and a standing seam metal roof.

In addition to 400 Capital Lane, Woodmont Industrial and AEW Capital Management also recently completed the construction of 200 Capital Lane, the largest building in the Capital Logistics Center, which is now equipped with T-5 lighting, an ESFR system, 87 dock doors plus two drive-in doors and 36’ clear ceilings throughout. Currently, 400,060 square feet of space is available for lease.

Conveniently located in Central Pennsylvania at the heart of the I-81 Distribution Corridor, the Capital Logistics Center fronts the Pennsylvania Turnpike and is less than a mile away from Harrisburg International Airport. The property is also near local FedEx and UPS facilities as well as Routes I-283, I-83 and 322.

Sunday, July 5, 2015

Nassimi Goes Shopping for Burlington County Center

by Steve Lubetkin,
Nassimi Realty says it will be sprucing up its latest South Jersey acquisition, Edgewater Park Plaza, a 115,000-square-foot shopping center in Edgewater Park, NJ near Philadelphia, which the firm just purchased. Terms of the sale were not disclosed.
"We are pleased to add a fifth center in the Philadelphia market,” says Nassimi Realty’s president, Mike Nassimi.We are planning a major redevelopment of the Edgewater Park Plaza site including the former Pathmark space. Our company continues to look at acquiring properties in the northeast, especially in the greater New York and Philadelphia corridors."
Edgewater Park Plaza2110 Route 130, is at the intersection with Woodlane Road. Current tenants in the center include Big Lots, Dunkin Donuts and a Getty gas station.
Nassimi Realty acquired the center from A&P, which until recently operated a Pathmark store at the location. Winbrook Management represented Nassimi Realty in the purchase. Metro Commercial Real Estate represented the seller.         
In the greater Philadelphia market, Nassimi Realty also owns the 600,000-square-foot Cedarbrook Plaza power center in Wyncote, PA; the 70,000-square-foot Airport Plaza adjacent to Chester County Airport; the 115,000-square-foot Weis Plaza in Kutztown, PA and a 300,000-square-foot retail center currently under development next to Trenton-Mercer Airport in Ewing, NJ.

Wednesday, July 1, 2015

The Greene Turtle Plans 10 Restaurants in Eastern PA

by Steve Lubetkin,
Maryland-based Greene Turtle Sports Bar & Grille chain will be coming to eastern Pennsylvania in 2016.

The company says a group of investors with more than 30 combined years of corporate management experience and ties to multiple global and regional quick-service and fast-casual restaurant franchises has signed a franchise agreement for the development of 10 units in Montgomery, Bucks, Lehigh and Northampton Counties.

Operating as The Integritty Group, franchisees Pranav Desai, Jiger Patel and Rajan Mahadevia are currently seeking properties and expect to open their first location in the spring of 2016.

“We are delighted to announce that as a continuation of our expansion beyond our Mid-Atlantic hub, we have secured a deal to establish a significant presence in Eastern Pennsylvania,” says Tom Finn, vice president of franchise business for The Greene Turtle. “In The Integritty Group’s partners, we have aligned with a team of very strategic thinkers who have extensive management background, including roles at IBM, and who are already familiar with the markets where they’ll be introducing our concept through their involvement in other restaurant systems. We feel strongly that they will be a great addition to our system and are perfectly qualified to bring The Greene Turtle to Pennsylvania.”

Pranav Desai says he and his business partners have been eyeing The Greene Turtle since before the chain began franchising. With business activity frequently taking them to Maryland and Washington, DC, he says, the partners had dined at The Greene Turtle in the past and had long been intrigued by its offering. When they learned that the chain was looking to franchise its concept in their market, he says, they approached the company to explore opportunities.

“Once we began researching the concept, we really liked what we saw,” he says. “We always wanted to get into a sports-themed concept and I liked that The Greene Turtle has intense brand loyalty and a broad appeal, especially with a stronger family demographic among its core customers. We also liked that the chain has a lot of room to grow in this market, and were impressed by the strong management in place and the fact that the corporate team has a good relationship with their other franchisees, it seemed like a great extension of our existing business mix.”

The Greene Turtle’s strong brand awareness is largely generated by the company’s involvement in community sports programs, and by its presence in high-traffic locations such as Ocean City, MD, Rehoboth Beach, DE, Baltimore-Washington International (BWI) Airport, and Washington, DC’s Verizon Center.

Earlier this month, The Greene Turtle opened its 40th location. There are more than 40 additional locations already committed to for development by franchisees in Maryland, Virginia, New Jersey, New York and Pennsylvania, including those covered in an 11-unit deal signed last year in South and Central New Jersey, as reported by, and in a separate 10-unit deal for New York’s Long Island.

Kushner Brings WeWork Coworking Space to Piazza

by Steve Lubetkin,

Capitalizing on the Philadelphia tech startup community’s romance with coworking facilities, Kushner Companies has signed WeWork, a co-working space provider, to more than 30,000 square feet at The Piazza in the Northern Liberties section of Philadelphia, PA.

Coworking spaces allow entrepreneurial startup companies to rent small amounts of work space, either in common work areas or in small offices. The cross-fertilization of ideas that occurs when entrepreneurs work alongside each other has driven a number of successful Philadelphia startup stories, but WeWork joins a crowded coworking marketplace in Center City that already includes category pioneer Indy Hall, Benjamin’s Desk, The Hive Philly, CultureWorks Greater Philadelphia, and a number of others, including The Bunker, which opened at Benjamin’s Desk earlier this week to provide space for military veteran-owned startups, with sponsorship by local media giant Comcast Corporation.

Kushner says the new lease marks another step in the company’s ongoing transformation of The Piazza into a vibrant live/work community.

Acquired by Kushner and Oaktree Capital Management in 2013, the Piazza consists of 500 apartments, 100,000 square feet of commercial space and an 80,000-square-foot plaza on a portion of the former Schmidt’s Brewery site.

“WeWork is an amazing company that offers lifestyle, aesthetic and community,” says Jared Kushner, CEO of the Kushner Companies.  “They have been searching for the right location to enter the Philadelphia market for several years, and the fact that they chose Northern Liberties shows they understand who their customers are, and that the Piazza is a location where they can draw the right population."

Kushner and its partners are in the middle of a multi-million dollar transformation of the Piazza that includes renovation of the apartments, construction of a new parking deck and the conversion of more than half of the existing commercial space for office use.

“The Piazza is a phenomenal property that can be even better,” says Kushner.  “The Northern Liberties area is particularly attractive to millennials and creative people. With the right partners such as WeWork, we are developing a dynamic live-work community that will make the Piazza a destination that sparks interaction of both residents and growing creative companies.”